by Randy Carey:
This is a legal question and not a compliance question. Most banks would just renew the loan rather than let it sit in default and thus have to report it past due for the customer and for call reporting. Having a different default rate does not create an ARM loan.
by Richard Insley:
It's not clear if this question relates to Reg.Z, but if so, the answers to questions like this boil down to Section 1026.17(c)(1): "The disclosures shall reflect the terms of the legal obligation between the parties." The only way post-default provisions should enter your TIL disclosures would be if you required the borrower to default!